Ethereum and its layer-2 networks are experiencing a massive uptick in user activity. Daily active addresses skyrocketed by 127% in the first half of 2024. This growth stands in stark contrast to Bitcoin's performance. The leading crypto, which is clearly becoming dominated by so-called HODLers, saw a 20% drop in daily active addresses during Q2.
What's driving this shift? It's all about the L2s.
Layer-2 networks, built on top of Ethereum, are designed to speed up transactions and keep fees low. They're like Ethereum's cooler, faster cousins. These solutions process transactions on separate chains before sending the data back to Ethereum for final recording.
Linea, Base, and Arbitrum are leading the L2 pack. Together, they boast a whopping 1.8 million daily active addresses. That's no small potatoes.
Vitalik Buterin, Ethereum's co-founder, called L2s "the ultimate playing field for action" back in May. He wasn't wrong. Institutional players and NFT enthusiasts are flocking to these networks in droves.
The numbers don't lie. Ethereum and L2 transactions jumped 59% in Q2 2024. But here's the kicker: most of that growth happened on L2s. They're outpacing Ethereum itself by a long shot.
"The move onchain is driven by a variety of use cases," according to a recent report. "We expect to see adoption grow as existing use cases mature and innovative new ones take hold."
It's not all sunshine and rainbows for Ethereum, though. Total transaction fees on the network dropped by 58% in Q2. But don't panic – this was actually by design. The Dencun upgrade in March slashed fees, making the network more user-friendly.
Meanwhile, Bitcoin's been having a rough go of it. Daily active addresses fell 20% in Q2, and daily active entities dropped 16%. It's looking a bit like yesterday's news compared to Ethereum's L2 party.